Conclusion

For the reasons stated above, the court concludes that Defendant Quality committed two
violations of the Washington Deeds of Trust Act when it commenced the nonjudicial foreclosure
of the Plaintiff’s Deed of Trust: (1) Quality violated RCW 61.24.010(1)(a), which requires a
corporate Trustee to have at least one corporate officer who is a Washington resident; and/or
(2) Quality violated RCW 61.24.010(2), which requires a Trustee of a deed of trust to have been
appointed by the beneficiary of the deed of trust.

Quality’s violations of the Deeds of Trust Act are grounds to sustain Plaintiff’s claim for
damages against Quality pursuant the Consumer Protection Act, Chapter 19.86 RCW. The
Plaintiff is entitled to a judgment in her favor and against Quality for treble the amount of her
injury, along with her costs of suit, including her reasonable attorneys’ fees.

I am writing to announce the formation of a new pro bono group and a policy initiative that we hope many of our readers will support and help publicize. Gary Aguirre, Bill Black, Richard Bowen, and Michael Winston are the founding members of the Bank Whistleblowers United. We are all from the general field of finance and we are all whistleblowers who are unemployable in finance and financial regulation because we spoke truth to power and committed the one unforgivable sin in finance and in Washington, D.C. – being repeatedly proved correct when the powerful are repeatedly proved wrong.

Economists rely largely on “revealed preference” – we think what you do matters more than what you say. For nearly seven years, every financial firm has known about my three colleagues. They are famous for their skills, courage, and integrity. Every financial firm claims that it now wants to make integrity their credo. Any financial firm that actually was committed to making integrity its credo, as opposed to its spin, would have long since hired my colleagues. Similarly, any government regulator, enforcer, or prosecutor that was serious about restoring the rule of law on Wall Street would have recruited us.

Our group publicly released four documents on January 29, 2016. The first outlines our proposals, all but one of which could be implemented within 60 days by any newly-elected President (or President Obama) without any new legislation or rulemaking. Most of our proposals consist of the practical steps a President could implement to restore the rule of law to Wall Street. As such, we expect that candidates of every party and philosophy will find most of our proposals to be matters that they strongly support and will pledge to implement.

The second document fleshes out and explains the proposals. We ask each candidate to pledge in writing to implement the portions of our plan that they specify to be provisions they support. Again, we invite President Obama to do the same.

The third document asks each candidate to pledge not to take campaign contributions from financial felons. That group, according to the federal agencies that have investigated them, includes virtually all the largest banks.

The fourth document explains why we formed our group is and contains our bios. I am personally proud and honored to be associated with my colleagues in this endeavor. We are (and have been) actively reaching out to encourage other bank whistleblowers to join Bank Whistleblowers United. The founding members of our group share some common traits, but are also diverse in our views. Overall, the bank whistleblowers that tried so hard and paid such a large price for trying to protect the public from the most recent crisis are an exceptionally diverse group of people and we want our group to reflect that full diversity. We cannot, however, in good conscience fail to act now given the urgency of the problems caused by the collapse of personal accountability for Wall Street elites. Our economy and our democracy are both imperiled by that collapse and require urgent redress. Please help us to get our proposals to every candidate, the media, and the public. Please ask the candidates you support to go on record supporting our initiatives and our campaign financing pledge.

The Bank Whistleblowers United Plan of Urgent Financial Change

January 29, 2016

We are a newly formed organization of financial sector whistleblowers dedicated to holding the elite financial leaders who led the fraud epidemics that caused the financial crisis and the Great Recession personally accountable and to helping to implement the urgent changes necessary to prevent or at least reduce the frequency and harm of future crises. Our group has expertise in finance, banking, real estate, accounting, underwriting, economics, law, securities, criminology, regulation, and financial derivatives. We also have international expertise.

We are releasing four documents today. This first document provides the outline of our plan that would allow any newly elected President (or President Obama) to restore the rule of law and end “too big to fail” without any new legislation or rules within 60 days. The second document explains and fleshes out the outline of our 60-Day Plan. The third document is our proposal to encourage the candidates to pledge that they will not take contributions from banks (and their officers) that the federal government, after investigation, have found to have engaged in fraud or other felonies. The fourth document explains who the whistleblowers are and provides our bios and contact information.

Our group is predominately former bankers who worked at fairly senior levels for enormous financial institutions. We do not hate banks or bankers as a group. We know, however, that when elite fraud is not stopped by the regulators and the prosecutors it is likely to create a “Gresham’s” dynamic. The Nobel Laureate George Akerlof was the first economist to describe this dynamic in 1970.

“[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”

We can confirm Akerlof’s warnings about fraud. Indeed, we can testify from personal knowledge that when bad ethics is encouraged it will over time tend to drive good ethics out of individual firms. Fraudulent senior bankers deliberately create a Gresham’s dynamic within the firm and in hiring “independent” professionals in order to drive honest employees out of the bank and to suborn outside professionals that are supposed to act as external “controls” to serve instead as fraud enablers. At places like Countrywide, thousands of employees left annually because they refused to abuse their customers. Only by restoring the rule of law to Wall Street can we allow honest banks and honest bankers to dominate Wall Street.

Similarly, the financial regulatory agencies are often dominated and rendered feeble by leaders who are the products of the “revolving door” or plan to use that “door” to increase their income. We have seen first-hand how that “door” can impair once great agencies.

Our goal of restoring accountability to Wall Street is not controversial. Indeed, there is unanimity among the candidates for the presidency that accountability for Wall Street elites has disappeared and urgently needs to be restored. But that same unanimity among candidates has existed for over a decade. Beginning with DOJ’s failure to prosecute the elite bankers that aided and abetted Enron’s senior managers’ looting and destruction of Enron in 2000-2001 – the consensus on the need to restore accountability has failed to produce accountability for elite bankers for over 15 years. Every political leader says they want to help honest bankers succeed. Nearly every political leader agrees that the “revolving door” corrupts Wall Street’s regulators. The movie The Big Short has a scene at a pool that is designed to be emblematic of the public perception that the SEC (and, by extension, the other federal financial regulators, the FBI, and the DOJ) is staffed by lawyers whose goal in life is to be hired by Goldman Sachs. One of our major insights is how law enforcement priorities with regard to financial elites have become sharply perverse as the financial regulatory agencies’ input to the FBI and DOJ have virtually ceased through the destruction of the agencies’ criminal referral process and been replaced by misdirected law enforcement priorities pushed by the elite bankers. We propose concrete steps to return our priorities to the most damaging financial frauds, which are always led by elites.

The public and the men and women running to be President have said that they want to hold Wall Street elites accountable. Our plan provides a practical means, designed by experts with a track record of actually holding elite bankers personally accountable for their crimes and abuses, that the next president can implement without new legislation or rules to promptly restore accountability. We hope that the candidates will treat the portions of our plan that they support, and our group, as a resource to embrace in order to achieve the goals they publicly say they share with us and the American people, starting with restoring personal accountability to Wall Street.

As whistleblowers who were the subject of retaliation we have been tested in the hottest and most brutal of business and regulatory crucibles. The warnings we gave to our superiors and politicians proved correct and we were attacked because we were correct substantively and insisted on doing the right thing. We are unemployable in banking and financial regulation precisely because of these qualities. (That fact should tell our readers a great deal about how deep and widespread the problems are in finance and financial regulation.) We have members who have led the most successful financial reregulatory efforts in the United States and helped produce the most effective investigative and prosecutorial system of elite financial criminals in our history.

We have no constraints on our ability to speak the truth and we have a history of speaking truth to power. What follows is not the product of press flacks or political spinmeisters. We have the expertise and personal knowledge to explain five key facts.

The most recent U.S. bubble and resultant financial crisis and Great Recession were driven by three epidemics of fraud led by elite bankers. The three epidemics that drove the crisis are appraisal fraud, “liar’s” loans (collectively, these were the loan origination frauds), and the resale of those fraudulently originated mortgages through fraudulent “reps and warranties” to the secondary market and the public. Banks, like fish, rot from the head – the “C Suite.” Liar’s loans is an industry term that shouts the industry’s knowledge that it was originating overwhelmingly fraudulent loans. In a liar’s loan the lender agrees not to verify data that is essential to prudent underwriting. This would be an insane practice for an honest lender – and it was practice that was always discouraged by the federal regulators – but it optimizes “accounting control fraud.”[1]

Tom Miller, the Nation’s longest serving state attorney general (for Iowa), was also a leader of key combined DOJ and state task forces on mortgage fraud. Industry spokesmen invariably try to get the public to believe that the banks were the victims of liar’s loans, but as Miller testified before the Fed, investigations prove the opposite.

“[Many originators invent] non-existent occupations or income sources, or simply inflat[e] income totals to support loan applications. Importantly, our investigations have found that most stated income fraud occurs at the suggestion and direction of the loan originator, not the consumer.”

Not a single one of those elite bankers who led the fraud epidemics has been prosecuted and only one, a woman who was only moderately senior, has been held personally accountable in any meaningful way through a civil suit (made possible by a whistleblower). This is the greatest strategic failure of the DOJ in recent history.

The SEC has also proven ineffective in holding the elite Wall Street bankers who led these fraud epidemics personally accountable. As with DOJ, one of the fundamental problems that has gotten worse is the “revolving door.” We propose a practical means of reducing that problem.

Dodd-Frank has not fixed the gaping problems endemic to finance that will cause future epidemics of elite financial fraud and resultant global crises.

We know how to identify developing fraud epidemics before they hyper-inflate financial bubbles, how to prevent or at least greatly reduce such epidemics, and how to prosecute effectively the elite banksters. Our group includes former regulators who demonstrated each of these abilities. What we need is the political will to make the vital changes in the face of fierce opposition from the elite banksters. That will is sapped by the revolving door.

Our initial purpose is to get candidates on record on which portions of our plan they will pledge to implement. Our 60-day plan is the first of the initiatives we will place before the public and the candidates. It consists of measures that the new President can take immediately on his or her own initiative without legislative action. We ask every candidate for the presidency to indicate which specific proposals of the Whistleblower Plan they will pledge to implement. As a group, we will not endorse any candidate. We will simply give a public certification that a candidate has provided a written pledge to implement the portions of the Whistleblower’s Plan that the candidate chooses to support. In the detailed description of our 60-Day Plan we set out dates on which the specific could be implemented by a new President (or President Obama) without new legislation or regulation. Those dates are illustrative of how quickly a President with the will to restore the rule of law and safety to Wall Street could do so. We are not demanding that candidates certify that they would meet that exact time schedule we set out. Our Plan can be implemented in 60 days and that would be desirable, but we realize that a new President will have many priorities and could implement our 60-Day Plan over, say, 120 days.

We unanimously support the 60-Day Plan, but our Plan is not a “take it or leave it” demand. The candidates will choose which provisions of our Plan they support and will pledge to implement. In this first document we outline the substance of the Plan. We are simultaneously releasing a longer document that explains the rationale for our Plan provisions and exactly how they can be implemented without new legislation or rules. Again, the dates that the longer document provides are designed to illustrate how quickly accountability could be restored without any news laws or rules.

We are also releasing today a campaign funding pledge that the Whistleblowers United supports. We will make public any pledges we receive from the candidates to implement our campaign funding pledge. The fourth document we release today explains who we are and why we came together to urge the prompt implementation of the restoration of the rule of law for Wall Street.

Require that all new hires agree to conditions that will end the “revolving door” – with no provision for waivers.

The FBI and the Department of Justice (DOJ) will publicly terminate their “partnership” with the Mortgage Bankers Association – the industry trade association which has a clear conflict of interest and harms prioritization by pushing solely for the prosecution of what should be far lower priority cases of crimes v. banks and never for the prosecution of what should be the highest priority cases of frauds led by banks’ senior officers

Revamp the federal treatment of whistleblowers and False Claim Act complainants to encourage their efforts and use them to hold financial elites personally accountable

Make public a list of exemplary financial whistleblowers and set forth in writing what they have done for the Nation. (The President should, of course, do this for whistleblowers in each field, not just finance.)

The President should hold a public event at which he or she presents appropriate awards in person to these exemplary whistleblowers. We are not talking about financial awards and we are willing to be excluded from consideration for these Presidential awards lest we be charged with self-aggrandizement.

Review the backlog of whistleblower and False Claims Act complaints with fresh eyes committed to finding any useful source of information to assist in deciding whether to bring enforcement, civil, or criminal actions against elite financial frauds.

Impose individual minimum capital requirements (IMCR) for all systemically dangerous institutions (SDIs) commensurate with the risk they pose because of their size

Impose IMCRs for all SDIs commensurate with the risk they pose because of their non-commercial bank activities

Impose IMCRs for all banks commensurate with the risk posed by their executive compensation systems

Impose IMCRs for all banks commensurate with the risk posed by their hiring, retention, and compensation systems for purportedly independent professionals such as outside auditors, appraisers, and credit rating agencies

Announce that it is the policy of the United States never to engage in a regulatory “race to the bottom” with any other government

Direct each major federally regulated bank to conduct and publicly report a “Krystofiak” study on samples of “liar’s” loans that they continue to hold. Krystofiak studies quantify the extent of loan origination and secondary market fraud by lenders.

End the use of deliberately unenforceable financial regulatory “guidelines”

Will You Support the Whistleblowers’ First 60-Day Pledge?

And so we ask each presidential candidate – which portions of the Whistleblowers’ 60-Day plan will you pledge to implement? We hope the candidates will commit to breaking Wall Street’s power over our economy and democracy. The Whistleblowers’ 60-Day plan provides any candidate with the practical steps necessary to make real the twin goals of restoring the rule of law to Wall Street and ending crony capitalism. Our goal is to offer constructive, realistic means by which the next President can achieve these twin goals.

[1] “Control fraud” refers to the use of the entity by the officials who control it as a “weapon” to defraud others. In finance, accounting is the fraudsters’ “weapon of choice.” Epidemics of accounting control fraud drove our three modern crises – the Savings and Loan debacle, the Enron-era scandals, and the most recent crisis.

Jan 29, 2016

Washington, DC – United States Senator Elizabeth Warren today released a report titled Rigged Justice: How Weak Enforcement Lets Corporate Offenders Off Easy. The report, the first in an annual series on enforcement, highlights 20 of the most egregious civil and criminal cases during the past year in which federal settlements failed to require meaningful accountability to deter future wrongdoing and to protect taxpayers and families.

“Much of the public and media attention on Washington focuses on enacting laws. And strong laws are important – prosecutors must have the statutory tools they need to hold corporate criminals accountable,” the report states. “But putting a law on the books is only the first step. The second, and equally important, step is enforcing that law. A law that is not enforced – or weakly enforced – may as well not even be a law at all.”

“When government regulators and prosecutors fail to pursue big corporations or their executives who violate the law, or when the government lets them off with a slap on the wrist, corporate criminals have free rein to operate outside the law. They can game the system, cheat families, rip off taxpayers, and even take actions that result in the death of innocent victims-all with no serious consequences.”

The 20 cases highlighted in Rigged Justice illustrate problematic enforcement patterns by federal agencies across a range of areas, from financial crimes to student loan rip-offs to auto safety violations to environmental disasters. In many of the cases described in the report, corporations reached settlements with the federal government that required no admission of guilt and held no individual executives accountable.

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

LETICIA LUCERO,
Plaintiff,

v.

CENLAR FSB, et al.,
Defendants.

No. C13-0602RSL

MEMORANDUM OF DECISION

This matter was heard by the Court in a bench trial commencing on September 24, 2015,
and, after a month’s recess to allow defendant Cenlar FSB to produce its witness, concluding on
October 27, 2015. Plaintiff Leticia Lucero brought this action against her mortgage loan servicer
alleging that it violated the Real Estate Settlement Procedures Act (“RESPA”), breached its
contractual and good faith obligations, and committed the tort of outrage when it charged
attorney’s fees and costs to plaintiff’s mortgage account and refused to explain the charges upon
request. Plaintiff seeks compensatory damages and attorney’s fees in this litigation.

[…]

C. Outrage
The elements of the tort of outrage are “(1) extreme and outrageous conduct,
(2) intentional or reckless infliction of emotional distress, and (3) severe emotional distress on
the part of plaintiff.” Rice v. Janovich, 109 Wn.2d 48, 61 (1987). Based on the evidence
submitted at trial, plaintiff has raised a reasonable inference and the Court finds that Cenlar,
annoyed that plaintiff had sued it after obtaining a loan modification and looking for leverage to
force her to abandon this litigation, adopted a strained and unprincipled analysis of the Deed of
Trust7 to justify the imposition of unpredictable and enormous charges directly onto plaintiff’s
mortgage statements as “Amounts Due.” Cenlar, having reviewed plaintiff’s financial situation
less than a year before and being fully aware that plaintiff was paying late charges every month,
had no reason to believe that she could cope with these charges. Cenlar reasonably should have
known (and was likely counting on the fact) that these charges would cause immense emotional
distress, which they did. Cenlar compounded the distress by denying plaintiff information about
these charges or the justification therefore. The first notice of the charges stated that they were
charged “in keeping with Washington law.” This assertion is wholly unsupported: Cenlar’s
witness acknowledges that the letter was a form into which the reference to “Washington law”
was inserted simply because the loan originated in Washington. No Washington case law,
statute, or regulation has been identified that authorize the charges levied against plaintiff’s
mortgage account. When plaintiff requested information regarding the charges, she was ignored
for months. Eventually various contract provisions were identified, and Cenlar asserted that it
was simply keeping track of charges it might eventually seek to recover from plaintiff.8
Regardless of whether Cenlar was demanding immediate payment or was simply threatening to
collect them in the future, the message was clear: continue this litigation and we will take your
home. Such conduct is beyond the bounds of decency and is utterly intolerable.
Damages caused by Cenlar’s outrageous conduct include:

$26,724 in charges to her account with NationStar
$1,950 in attorney’s fees for drafting and sending requests for information to Cenlar
$208 time spent reviewing documents regarding charges imposed on her mortgage account
$30 in gas traveling to and from attorney’s office
$12 in copying and postage expenses related to the requests for information
$2,700 in counseling expenses
$21,504 in lost wages from November 2014 to February 2015
$13,760 in reduced wages from March 2015 to December 2015
$55,000 in emotional distress damages from December 4, 2013, to March 24, 2014
$42,500 in emotional distress damages from March 25, 2014, to June 18, 2014
$49,500 in emotional distress damages from June 19, 2014, to October 27, 2015
for a total of $213,888.

For all of the foregoing reasons, the Clerk of Court is directed to enter judgment in favor
plaintiff and against defendant in the amount of $213,888.9 To the extent plaintiff has a
contractual or statutory right to attorney’s fees, she may file a motion pursuant to Fed. R. Civ. P.
54(d)(2).

DO NOT PUBLISH

PER CURIAM.

Anthony Tharpe, proceeding pro se, alleges that Nationstar Mortgage violated the Fair Debt Collection Practices Act (FDCPA) through a series of communications about a mortgage bearing his name. The district court dismissed his complaint under Federal Rule of Civil Procedure 12(b)(6). It construed the complaint to allege that Nationstar’s only communication with Tharpe that violated the FDCPA was its filing of the foreclosure action. The court held that, construed in that manner, the complaint failed to state a claim for which relief could be granted because the FDCPA covers only debt collection activity and “[a] foreclosure action does not count as debt collection activity for FDCPA purposes.” Tharpe appeals that judgment.

Our decision in Reese v. Ellis, Painter, Ratterree & Adams, 678 F.3d 1211 (11th Cir. 2012), makes two points that are significant for this appeal. First, Reese noted that none of our published precedents decide the question on which the district court in this case rested its holding: “whether enforcing a security interest is itself debt-collection activity covered by the [FDCPA].” Id. at 1218 n.3.[1] Second, Reese held that “[a] communication related to debt collection does not become unrelated to debt collection simply because it also relates to the enforcement of a security interest.” Id. at 1218. That means, regardless of whether Nationstar was otherwise attempting to foreclose on the mortgage bearing Tharpe’s name, if it also communicated with him in order to collect from him on the underlying debt, that communication is subject to the FDCPA.

The question, then, is whether Tharpe’s complaint sufficiently alleges that in addition to acting to foreclose on his property Nationstar communicated with him in an attempt to collect on the note. We think that it does given that Tharpe is pro se and we liberally construe pro se complaints. See Saunders v. Duke, 766 F.3d 1262, 1266 (11th Cir. 2014). Liberally construed, Tharpe’s complaint alleges more than that Nationstar undertook to foreclose on his property. It also alleges that “Nationstar and its predecessors” have been attempting to collect from him on the underlying note “for the last 7 years,” including at times when Nationstar was not pursuing foreclosure. The allegations in the complaint thus extend beyond the foreclosure action, necessarily implying communications about collecting on the underlying debt. That, along with the fact Tharpe has plausibly alleged Nationstar is a “debt collector” of the sort covered by the FDCPA,[2] makes this case analogous to Reese. Nationstar’s motion to dismiss should have been denied.

In reaching this conclusion, we leave unanswered whether foreclosing on mortgaged property is, by itself, debt collection activity within the scope of the FDCPA.[3] All that we decide today is that Tharpe’s complaint states a claim under the FDCPA because, liberally construed, it fits within the parameters staked out in Reese.

[2] Nationstar contends that Tharpe’s allegations that it is a “debt collector” are vague and conclusory. They are not. Tharpe has alleged that Nationstar’s business involves the regular collection of thousands of debts from thousands of consumers. That allegation, if true, would support a finding that Nationstar is a “debt collector” within the scope of the FDCPA. See 15 U.S.C. § 1692(6).

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXASIf You Had an Account with Chase,
You May be Eligible for a Payment from a Class Action Settlement

A federal court authorized this notice. This is not a solicitation from a lawyer.

An $8.75 million Settlement has been reached with JPMorgan Chase Bank, N.A. and Chase Bank USA, N.A. (collectively “Chase”) in a lawsuit alleging that Chase violated the Fair Credit Reporting Act (“FCRA”) by accessing consumer credit reports to conduct “Account Review Inquiries” of Chase customers after their account relationships had ended.

“Account Review Inquiry” means a request by Chase for an individual’s credit bureau information, where such inquiry is visible to the individual and Chase, but not to other users of the individual’s credit bureau information. This definition excludes prescreening inquiries made by Chase pursuant to the “firm offer of credit or insurance” provision of the FCRA, 15 U.S.C. § 1681b(c)(1)(B), and excludes inquiries made by Chase for collection of a debt due and owing to Chase, and that has not been discharged in bankruptcy.

The phrase “Glass-Steagall” generally refers to the separation of commercial banking from investment banking. Congress effected a separation of commercial and investment banking through four sections of the Banking Act of 1933—Sections 16, 20, 21, and 32. These four statutory provisions are commonly referred to as the Glass-Steagall Act.

Key Takeaways of This Report

The Glass-Steagall debate is not centered on prohibiting risky financial services; rather, the debate is about whether to permit inherently risky commercial and investment banking activities to be conducted within a single firm—specifically within firms holding federally insured deposits.

Over the course of the nearly 70-year-long Glass-Steagall era, the clear-cut separation of traditional commercial banking and securities activities gradually eroded. This erosion was the result of a confluence of matters, including market changes, statutory changes, and regulatory and judicial interpretations.

The Glass-Steagall era formally ended in 1999 when the Gramm-Leach-Bliley Act (GLBA) repealed the Glass-Steagall Act’s restrictions on affiliations between commercial and investment banks.

Less than a decade after GLBA, the United States suffered its worst financial crisis since the Great Depression. Some have argued that the partial repeal either was a cause of the financial crisis that resulted in the so-called Great Recession or that it fueled and worsened the crisis’s deleterious effect. On the other hand, some policymakers argue that Glass-Steagall issues were not significant causes of the crisis, and that the Glass-Steagall Act would have made responding to the crisis more difficult if it had remained in place.

The Dodd-Frank Act neither reinstated the sections of the Glass-Steagall Act that were repealed by GLBA nor substantially modified the ability of banking firms to affiliate with securities firms. It did, however, include some arguably Glass-Steagall-like provisions, which were designed to promote financial stability going forward, reduce various speculative activities of commercial banks, and reduce the likelihood that the U.S. government would have to provide taxpayer support to avert or minimize a future financial crisis.

Some believe that a more effective way of accomplishing these policy objectives would be to fully reinstate the Glass-Steagall Act. In fact, multiple bills have been introduced in the 114th Congress with that stated purpose. These bills include: S. 1709/H.R. 3054, The 21st Century Glass-Steagall Act of 2015, and H.R. 381, the Return to Prudent Banking Act of 2015. On the other side of the policy discussion, some argue that the Glass-Steagall Act is ill-suited for the current financial system and that the recent financial crisis would have occurred even if GLBA had never partially repealed the Glass-Steagall Act.

Even if the Dodd-Frank Act had completely re-enacted the repealed provisions of the Glass-Steagall Act, the financial history of the Glass-Steagall era shows that regulatory walls could be difficult to maintain or enforce.

We just got wind of another letter that was written to the Special Agent in Charge at the Tampa FBI from the Chief of the Fraud Section of the U.S. DOJ, regarding the investigation by the FBI in the allegations contained in the 752-page Report to Armando Ramirez, Clerk of the Circuit Court of Osceola County, Florida (read it below)…

BRENDAN BRINDISE and SUZANNE BRINDISE, Appellants,
v.
U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, FOR THE BENEFIT OF HARBORVIEW 2005-3 TRUST FUND; COCO BAY COMMUNITY ASSOCIATION, INC.; and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC. AS NOMINEE FOR COUNTRYWIDE HOME LOANS, INC., Appellees.

Nancy M. Wallace of Akerman, LLP, Tallahassee; William P. Heller of Akerman, LLP, Fort Lauderdale; and Rebecca N. Shwayri of Akerman, LLP, Tampa, for Appellee U.S. Bank National Association, as Trustee, for the Benefit of Harborview 2005-3 Trust Fund.

No appearance for remaining Appellees.

LaROSE, Judge.

Brendan and Suzanne Brindise appeal a final foreclosure judgment. They raise but one issue—one that may be of first impression in the district courts of appeal. They claim that the trial court erroneously entered final judgment because, prior to filing suit, U.S. Bank National Association, the holder of the note, failed to give them written notice of the assignment of their mortgage loan as required by section 559.715, Florida Statutes (2012). According to the Brindises, such notice was a condition precedent to suit. The Brindises posit that U.S. Bank’s failure of pleading and proof on this issue barred foreclosure. We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A). We affirm the final foreclosure judgment. In doing so, we hold only that providing the notice described in section 559.715 is not a condition precedent to foreclosure.

Background

In 2005, the Brindises took out a loan and signed a promissory note, secured by a mortgage, to buy a home in Lee County. Countrywide Home Loans, Inc., was their lender. Later, U.S. Bank acquired the note by an assignment through a blank indorsement. See § 673.2051(2), Fla. Stat. (2014) (“If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a `blank indorsement.’ When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.”). U.S. Bank also became the assignee of the mortgage.

The Brindises stopped making loan payments sometime in 2010. As holder of the note, U.S. Bank filed a foreclosure suit in the fall of 2012.[1] In addition to foreclosure, U.S. Bank sought a money judgment for the entire accelerated principal due on the note, together with any deficiency after sale, interest, and attorney’s fees. A legend on the bottom of U.S. Bank’s amended complaint states that the lawsuit “is an attempt to collect a debt.”

As a defense to the suit, the Brindises alleged that U.S. Bank failed to give them written notice of assignment as required by section 559.715. The Brindises contend that upon becoming holder of the note through an assignment, and at least thirty days before filing suit, U.S. Bank had to provide written notice to them. The trial court rejected this argument and denied their motion for involuntary dismissal. At the conclusion of a nonjury trial, the trial court entered a final foreclosure judgment in favor of U.S. Bank.

Enacted in 1989, section 559.715 is part of the Florida Consumer Collection Practices Act (FCCPA). See § 559.551. Debt collection practices are also subject to federal oversight under the Fair Debt Collection Practices Act. 15 U.S.C. §§ 1692-1692p (FDCPA). Our brief reference to the federal statute is important because each party relies on any number of federal cases interpreting the FDCPA, an analog to the FCCPA. See § 559.552 (providing that the FCCPA does not limit or restrict the application of the FDCPA; in the event of any inconsistency in the two acts, the more protective for the consumer or debtor prevails). State law does not mandate that the state courts obey federal precedent. Section 559.77(5) provides that “[i]n applying and construing this section, due consideration and great weight shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to the [FDCPA].” Dish Network Serv., L.L.C. v. Myers, 87 So. 3d 72, 77 (Fla. 2d DCA 2012).

Section 559.715 provides as follows:

Assignment of consumer debts. — This part does not prohibit the assignment, by a creditor, of the right to bill and collect a consumer debt. However, the assignee must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt. The assignee is a real party in interest and may bring an action to collect a debt that has been assigned to the assignee and is in default.

The legislature intended the statute to streamline the collection of consumer debts. See Fla. S. Comm. on Judiciary, CS for CS for SB 196 (1989) Staff Analysis 1 (Apr. 25, 1989). By allowing the assignment of the right to bill and collect, the statute “permits the consolidation of all claims by various creditors against a particular debtor.” See Fla. H.R. Comm. on Com., HB 1566 (1989) Staff Analysis 1 (June 22, 1989). The salutary result of such consolidation is to reduce the number of lawsuits that collection agencies must pursue. Id. Indeed, the assignment and consolidation process allows a stranger to the initial financing transaction, typically a collection agency, to proceed more efficiently to obtain payment of delinquent obligations from a single debtor for the benefit of multiple creditors. See Fla. S. Comm. on Judiciary, CS for CS for SB 196 (1989) Staff Analysis 1 (Apr. 25, 1989). The written notice of assignment alerts the consumer that the creditor has delegated a right to recover to the assignee. It is not apparent, however, that section 559.715 applies neatly in the mortgage foreclosure context where, more often than not, a single note holder seeks to foreclose on a single mortgage and note upon the mortgagor’s default. The assignee of the note is not a collection agent for others.[2]

Because section 559.715 applies to consumer debt, the parties battle over whether a foreclosure suit is an effort to collect a consumer debt. The parties jockey almost ceaselessly trying to convince us that a foreclosure action is or is not a debt collection proceeding. On that point, the federal cases to which they cite offer no meaningful consistency. See, e.g., Dunavant v. Sirote & Permutt, P.C., 603 Fed. Appx. 737 (11th Cir. 2015) (holding that publishing mortgage foreclosure notices amounts only to enforcement of a security interest and not a collection of debt for purposes of the FDCPA); Summerlin Asset Mgmt. V Trust v. Jackson, No. 9:14-cv-81302, 2015 WL 4065372 (S.D. Fla. July 2, 2015) (stating that compliance with section 559.715 of the FCCPA is not a condition precedent to the commencement of a mortgage foreclosure action); Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F. 3d 1211 (11th Cir. 2012) (noting, in the context of a “dunning” letter from a law firm, that a plausible claim was stated under the FDCPA where it was alleged (1) that the defendant is a “debt collector” and (2) that the challenged conduct is related to debt collection); Birster v. Am. Home Mortg. Servicing, Inc., 481 Fed. Appx. 579 (11th Cir. 2012) (holding that mortgage loan servicer’s conduct supported conclusion that it engaged in debt collection activity, in addition to enforcing a security interest, under FDCPA).

Section 559.55(6)[3] defines “debt” or “consumer debt” as “any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” Because the Brindises borrowed money to buy a home, they argue that they incurred a consumer debt to which section 559.715 applies.

U.S. Bank does not seriously argue that an effort to collect on a defaulted mortgage loan can never be an attempt to collect a consumer debt. Rather, and despite the admonition in its amended complaint, U.S. Bank contends that the filing of a foreclosure suit, alone, is but an attempt to enforce its security interest in the property.[4] See, e.g., Dunavant, 603 Fed. Appx. 737 (stating that publication of foreclosure notices amounts only to enforcement of a security instrument and not a debt for purposes of the FDCPA).

Focusing solely on whether the foreclosure suit is an effort to collect a consumer debt, the parties urge us to become ensnared unnecessarily in a briar patch. We need not fight their fight. Even if a foreclosure suit is an effort to collect a consumer debt, several reasons compel us to conclude that the trial court did not err.

First, we examine the statute’s text. Section 559.715 has no language making written notice of assignment a condition precedent to suit. The Legislature, of course, knows how to condition the filing of a lawsuit on some prior occurrence. It has done so, for example, for libel and slander actions. §§ 770.01-.02, Fla. Stat. (2014). Before a victim of alleged medical malpractice can file a negligence suit, the victim must engage in a rigorous presuit investigation and discovery process. §§ 766.203-.206, Fla. Stat. (2014). In the condominium context, the Legislature has mandated that the parties engage in an alternative dispute resolution process before seeking trial court relief. § 718.1255 (4), Fla. Stat. (2014). The Legislature knows how to create a condition precedent. Because the Legislature declined to be more specific when enacting section 559.715, we will not expand the statute to include language the Legislature did not enact.

Second, anticipating the assignment of the right to bill and collect to a third party, section 559.715 provides that the assignee is “a” real party in interest empowered to collect the debt. The open-ended “a” indicates that the assignee is not the only real party in interest. If that were the intent, the Legislature would have referred to “the” real party in interest. Accordingly, the statute reflects that the assignor retains rights against the debtor. The right to bill and collect, thus, does not rest exclusively with the assignee. In such a situation, requiring written notice from the assignee makes perfect sense; notice alerts the debtor that multiple parties may seek to collect a delinquent debt.

The foreclosure suit, here, poses no such concern. Nothing in our record suggests that, upon assignment, U.S. Bank received anything less than the full bundle of rights associated with the Brindises’ mortgage loan. By assignment, U.S. Bank owned the note and the mortgage. The assignor divested itself of any interest in the Brindises’ mortgage loan. U.S. Bank alleged and proved that it held the note at the time it filed suit. On appeal, the Brindises do not challenge U.S. Bank’s standing. Florida law is clear that the note holder has the right to foreclose. See § 673.3011(2), Fla. Stat. (2014); Creadon v. U.S. Bank N.A., 166 So. 3d 952, 954 (Fla. 2d DCA 2015); Mazine v. M & I Bank, 67 So. 3d 1129, 1130 (Fla. 1st DCA 2011). That right exists whether or not another entity services the loan or whether the holder acquired the note by assignment. U.S. Bank is “the” real party in interest.

Third, viewing section 559.715 in the broader context of the FCCPA further undermines the Brindises’ position. The Brindises argue that if compliance with section 559.715 is not a condition precedent to suit, they will have no remedy for the alleged failure to provide notice. Section 559.72 prohibits specified debt collection practices. For example, it prohibits a debt collector from using threats of force or violence, wrongful disclosure of information, abusive or harassing techniques, abusive language, and improper timing of collection phone calls. See, e.g., § 559.72(2), (5), (6), (8), (17); Dish Network, 87 So. 3d at 74 (stating a claim that Dish (1) willfully engaged in conduct that could reasonably be expected to abuse or harass in violation of section 559.72(7), and (2) attempted to collect a debt while knowing that it was not a legitimate debt in violation of section 559.72(9)).[5] The Brindises do not claim that U.S. Bank engaged in such untoward tactics. If it had, the legislature has created private causes of action for consumers to recover damages and other relief. See § 559.77. Those remedies, however, do not extend to section 559.715. Indeed, the prohibitions in section 559.72 do not include the alleged failure to give notice. But, the FCCPA imposes a sweeping scheme of administrative enforcement. See §§ 559.725, .726, .727, .730, .77, .78, .785. For example, a person who violates any provision of the FCCPA is subject to a cease and desist order. § 559.727. Further, persons registered or required to be registered under section 559.553 are subject to disciplinary action for failure to comply with any provision of the FCCPA. § 559.565. We are unaware if the Brindises availed themselves of these procedures. Nevertheless, we are not prepared to conclude that not applying section 559.715 immunizes an alleged violator as they contend.

The FCCPA prohibits egregious debt collection practices and provides legal remedies to protect consumers from harassing collection efforts. See Summerlin, 2015 WL 4065372, at *4 (stating that the purpose and intent of the FCCPA “is to eliminate abusive and harassing tactics in the collection of debts”). The Brindises have not demonstrated that the mere filing of a foreclosure suit, even one seeking money damages, implicates those concerns. Thus, where administrative enforcement mechanisms exist, making section 559.715 a condition precedent is not necessary to the primary purpose of the FCCPA.

Fourth, with this broader understanding of the FCCPA, we conclude that the Brindises’ reliance on Gann v. BAC Home Loans Servicing LP, 145 So. 3d 906 (Fla. 2d DCA 2014), is misplaced. They contend that Gann compels the conclusion that filing a foreclosure suit constitutes a section 559.715 “action to collect a debt.” But, Gann does not implicate section 559.715. In Gann, a mortgagor sued under the FCCPA, alleging illegal collection practices by a creditor in violation of section 559.72(9), Florida Statutes (2011). 145 So. 3d at 907. Gann held only that the mortgagor stated a cause of action for prelitigation harassing debt collection practices. Id. at 910. The Brindises make no such claim against U.S. Bank.

Fifth, the Brindises’ reliance on Burt v. Hudson & Keyse, LLC, 138 So. 3d 1193 (Fla. 5th DCA 2014), is also off the mark. In that case, the Fifth District reversed entry of summary judgment for a creditor because a material issue of fact remained as to whether the creditor had actually provided the written notice required by section 559.715. Id. at 1194-95. Reading far too much into Burt, the Brindises argue that the case establishes that section 559.715 has been incorporated into the elements of pleading a foreclosure complaint. Burt, however, did not even discuss section 559.715 as a condition precedent to suit. Most significant, Burt involved the assignment of a credit card debt, the quintessential form of consumer debt. See Burt, 138 So. 2d at 1194.

Sixth, the Brindises ignore the fact that the lender could transfer the note without prior notice to them. Specifically, paragraph 20 of the mortgage they executed provides that the note “can be sold one or more times without prior notice to [the Brindises].” As a matter of contract, section 559.715 is inapplicable.

We also find it significant that the Brindises contractually agreed with their lender on the procedure by which they would receive notice of any default and the manner in which the lender could accelerate all payments due. Paragraph 22 of the mortgage specifically provides as follows:

22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in the Security Instrument . . . The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding[,] and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. . . .

The Brindises have not argued on appeal that they did not receive the paragraph 22 notice or that the notice was deficient.[6]

The Brindises entered into a binding contract and must recognize “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship.” Singleton, 882 So. 2d at 1007. Under paragraph 20, the Brindises are not entitled to the notice they claim is due under section 559.715. And, in the event of default, they agreed to a notice method independent of section 559.715.

Conclusion

We hold that failure to provide written notice under section 559.715 did not bar U.S. Bank’s foreclosure suit, nor did it create a condition precedent to the institution of the foreclosure suit. Accordingly, we affirm the trial court’s final foreclosure judgment. However, because innumerable foreclosure cases are pending in the trial and district courts where defendants have raised section 559.715 as a bar to foreclosure, we certify to the supreme court the following question as one of great public importance:

IS THE PROVISION OF WRITTEN NOTICE OF ASSIGNMENT UNDER SECTION 559.715 A CONDITION PRECEDENT TO THE INSTITUTION OF A FORECLOSURE LAWSUIT BY THE HOLDER OF THE NOTE?

Affirmed; question certified.

NORTHCUTT, J., Concurs.

KHOUZAM, J., Dissents with opinion.

KHOUZAM, Judge, Dissenting.

I would hold that the plain language of section 559.715 does create a condition precedent to a foreclosure suit. Therefore, in my view, U.S. Bank was required to give the Brindises written notice that it had become the holder of the note through assignment at least thirty days before filing a foreclosure complaint against them. Accordingly, I would reverse the final foreclosure judgment in this case.

“[T]he polestar of statutory construction [is the] plain meaning of the statute at issue.” Dep’t of Transp. v. Mid-Peninsula Realty Inv. Grp., LLC, 171 So. 3d 771, 776 (Fla. 2d DCA 2015) (second alteration in original) (quoting Acosta v. Richter, 671 So. 2d 149, 153 (Fla. 1996)). A reviewing court must look first to the actual language of the statute and give that language its plain and ordinary meaning. Therlonge v. State, 40 Fla. L. Weekly D1646 (Fla. 4th DCA July 15, 2015). Looking at the plain meaning of the statute is the primary way a court should determine legislative intent. State v. Dorsett, 158 So. 3d 557, 560 (Fla. 2015). Only where the language of a statute is unclear or ambiguous should a court use the rules of statutory construction to discern legislative intent. Id. A reviewing court cannot add words that the legislature did not include. Therlonge, 40 Fla. L. Weekly at D1647. “If the words are plain, they give meaning to the act, and it is neither the duty nor the privilege of the courts to enter speculative fields in search of a different meaning.” Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 460 (6th Cir. 2013) (quoting Caminetti v. United States, 242 U.S. 470, 490 (1917)).

The FCCPA does not specifically exclude foreclosure—or, more generally, the enforcement of security interests—from its reach. And a borrower’s obligation under a promissory note in a residential foreclosure suit falls within the broad definition of “consumer debt” contained in section 559.55(6). Though this definition has already been recited by the majority, it is worth repeating here:

“Debt” or “consumer debt” means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

In the foreclosure context, a borrower is a consumer who is obligated under the promissory note to pay money to the mortgagee. See Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216 (11th Cir. 2012) (interpreting the FDCPA’s definition of a “debt,” which is essentially identical to the definition found in the FCCPA); Glazer, 704 F.3d at 463 (“There can be no serious doubt that the ultimate purpose of foreclosure is the payment of money.”). And this payment obligation arose out of a transaction whose subject is property used primarily for personal, family, or household purposes because the borrower lives on the property. See Reese, 678 F.3d at 1217.

Going even further, the very purpose of a mortgage is to secure repayment of a debt and therefore the enforcement of the mortgage itself is a debt collection activity. See Black’s Law Dictionary (10th ed. 2014) (defining “mortgage” as “[a] conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms” and “foreclosure” as “[a] legal proceeding to terminate a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property”); see also Glazer, 704 F.3d at 461 (broadly holding that “mortgage foreclosure is debt collection under the FDCPA” because “every mortgage foreclosure, judicial or otherwise, is undertaken for the very purpose of obtaining payment on the underlying debt, either by persuasion (i.e., forcing a settlement) or compulsion (i.e., obtaining a judgment of foreclosure, selling the home at auction, and applying the proceeds from the sale to pay down the outstanding debt)”). Indeed, U.S. Bank acknowledged in its amended complaint that the foreclosure suit was “an attempt to collect a debt.”

Once we establish that a foreclosure suit is an action to collect a debt to which the FCCPA applies, it becomes clear based on the plain language of section 559.715 that it creates a condition precedent to a foreclosure suit. Section 559.715 provides that an “assignee must give the debtor written notice of [an] assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt” (emphasis added). Though the majority suggests that this language is not specific enough to effectively create a condition precedent, I disagree. It is true that the legislature has, in other areas of the law, created more involved and specific conditions precedent. But that fact does not undermine the clear mandate found in section 559.715 that an assignee must give the debtor written notice of an assignment at least thirty days before taking any action to collect the debt. The majority is correct that the Fifth District’s decision in Burt v. Hudson & Keyse, LLC, 138 So. 3d 1193 (Fla. 5th DCA 2014), is not directly on point because it was an appeal of a final summary judgment and dealt with credit card debt; however, Burt does stand for the proposition that lack of compliance with section 559.715 may, at a minimum, be raised as a defense. Thus, I believe Burt does support the position that section 559.715 creates a condition precedent.

Because the plain language of section 559.715 is clear and unambiguous, the majority’s focus on the broader purpose of the FCCPA is misplaced. See Dorsett, 158 So. 3d at 560 (stating that a court should look primarily at a statute’s plain meaning to determine legislative intent and that a court should only apply rules of statutory construction to determine legislative intent where the plain language of the statute is unclear or ambiguous). However, I also believe that interpreting 559.715 as creating a condition precedent to foreclosure does not conflict with the broader purpose of that section or the FCCPA as a whole.

The majority points out that section 559.715 was intended to streamline the collection of consumer debts by allowing various creditors’ claims against a single debtor to be consolidated and pursued by a collection agency. Accordingly, the majority suggests that the section does not apply in the mortgage foreclosure context because the assignee of the note is generally not a collection agent for others. But the fact that mortgage foreclosure is not the typical scenario to which the statute is applied does not mean that the statute is not applicable to mortgage foreclosure. And there is nothing in the language of the statute itself—or, indeed, the staff analyses that the majority cites— that limits its application to debt collection agencies. Rather, the statute simply permits the assignment of consumer debts and provides that the assignee must give the debtor written notice of the assignment “at least 30 days before any action to collect the debt.”

The majority also cites to the language in section 559.715 stating that the assignee is “a” real party in interest as opposed to “the” real party in interest, suggesting that this word choice shows that this section only applies where the assignor retains some rights. But it seems to me that this language simply allows the assignee to be one of multiple parties who hold an interest; it does not limit the section’s application to scenarios where the assignor has retained some rights.

Next, the majority points out that the Brindises could have sought relief under the sections of the FCCPA that provide for administrative enforcement. For example, section 559.725 provides that consumers’ complaints against debt collectors must be investigated and section 559.727 provides that corrective actions may be taken to remedy violations. But in my view the fact that these procedures were available to the Brindises does not negate the language found in section 559.715 providing for notice as a condition precedent to suit. Moreover, without notice of the assignment, it would be logistically difficult for borrowers like the Brindises to meaningfully pursue these administrative remedies.

Additionally, the majority asserts that making section 559.715 a condition precedent is not necessary to the primary purpose of the FCCPA, which is to protect consumers from abusive and harassing collection efforts. The majority points out that the Brindises do not allege that U.S. Bank engaged in these egregious tactics. But the plain language of section 559.715 reveals that it does not address these egregious tactics that are the primary focus of the FCCPA; rather, section 559.715 allows the assignment of consumer debts and requires assignees to give notice of an assignment.

The majority points out that Paragraph 20 of the mortgage allows the lender to transfer the note without prior notice to the Brindises, concluding that this provision renders section 559.715 inapplicable as a matter of contract law. But section 559.715 does not require notice prior to transfer and therefore does not conflict with Paragraph 20 in any way. Indeed, Paragraph 20 is completely consistent with section 559.715 because it goes on to provide that written notice of a change in loan servicer “will be given” to the borrower and specify that the notice must include “the name and address of the new Loan Servicer, the address to which payments should be made[,] and any other information RESPA [Real Estate Settlement Procedures Act, 12 USC §§ 2601-17] requires in connection with a notice of transfer of servicing.”

Finally, the majority opines that the Brindises are not entitled to a notice under section 559.715 because they received a notice under Paragraph 22 of the mortgage. It is true that Paragraph 22 of the Brindises’ mortgage provides how they would be notified of any default and the manner in which the lender could accelerate all payments due. But Paragraph 22 does not provide for a notice of the assignment of debt, which is the notice that section 559.715 requires. Because Paragraph 22 addresses a completely different notice than section 559.715, a sufficient Paragraph 22 notice cannot substitute for a sufficient notice under section 559.715.

For all of these reasons, I would hold that section 559.715 creates a condition precedent to a foreclosure suit and therefore I would reverse.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

[1] Although U.S. Bank held the note, our record indicates that Nationstar Mortgage, LLC, has serviced the loan since August 2013. BAC Home Loans Servicing, LP, was a prior servicer.

[2] It does not seem obvious that U.S. Bank would qualify as a collection agency under the FCCPA. See § 559.533(3)(c), (i) (providing that registration requirements for collection agencies do not apply to financial institutions authorized to do business in Florida or to an FDIC insured institution), as amended in 2014, which renumbered the provision, without change, from section 559.553(4) to 559.553(3). 2014 Fla. Sess. Law Serv. Ch. 2014-116.

[3] As amended in 2014, which renumbered the definition provision, without change, from section 559.55(1) to 559.55(6). Ch. 2014-116, Laws of Fla.

[6] Although not directly relevant to our decision, we observe that the Brindises have not shown what, if any, prejudice they suffered as a result of receiving no notice under section 559.715. They stopped making payments in 2010. They received the paragraph 22 letter, they appeared and defended in the lawsuit, and the original note was placed in the court file, eliminating the risk of another suit on the same note. We also observe that the paragraph 22 letter gave the Brindises a thirty-day cure period, a breathing period similar to that contained in section 559.715.

Healey wrote in a letter to Secretary of the Commonwealth William Galvin on Tuesday that the title clearing law “is not lawfully the subject of a referendum petition.”

Sarah McKee, a former federal prosecutor from Amherst who signed a petition to repeal the law that initiated the ballot referendum process, said she is disappointed in Healey’s ruling. “I’m disappointed that the attorney general who takes an oath to support the Massachusetts Constitution did not consider the ways in which this new law … actually violates the Constitution,” McKee said.

Marie and Vilnor Septimus appeal a final judgment of foreclosure entered in favor of Christiana Trust, a division of Wilmington Savings Fund Society, FSB, as Trustee for Normandy Mortgage Loan Trust, Series 2013-18, and JPMorgan Chase Bank National Association (“the bank”). They contend, among other things, that the bank failed to prove standing. We agree and reverse.

The bank, a successor plaintiff, failed to demonstrate that its predecessor had standing at the time the action was commenced. Although the bank eventually filed a blank-indorsed note, the note attached to the complaint did not contain the indorsement, and the bank points to no other evidence demonstrating standing at the time the complaint was filed. The bank asks this court to take judicial notice of the FDIC’s assignment of the note and mortgage to its predecessor before the complaint was filed. However, even if standing were demonstrated by the assignment, this evidence was not admitted at trial, and our judicial notice would not change the fact that the trial court erred in entering judgment for the bank where it did not prove standing.

Because we reverse due to lack of standing, any remaining issues such as proof of damages are moot.

Four years after the ‘Bank of Abercrombie’ bill was laughed out of the legislature, the push for a state-owned bank is being revived in the form of HB326 sponsored by Reps. Calvin Say, Clift Tsuji, Marcus Oshiro, and Isaac Choy.

Their plan involves redirecting hundreds of millions of dollars of State money to an as-yet nonexistent bank focusing its lending efforts on troubled Hawaii mortgages. HB326 doesn’t actually create the bank, instead mandating the DCCA to come up with legislation. But the bill directs HHFDC to rush out with millions of dollars in taxpayer money and begin buying up “distressed residential properties encumbered by problematic mortgages” right away.

Testifying against a similar bill in 2012, Stefanie Sakamoto of the Hawaii Credit Union League explained: “…the state would be in an extremely precarious situation in the event of any financial difficulty within the bank, and within the state. Coupled with the notion of purchasing troubled mortgages, this could be an extremely dangerous concept, which would place taxpayer money at enormous risk….”

HERRING ANNOUNCES RECORD SETTLEMENT OF MORTGAGE-BACKED SECURITIES CASE AGAINST BANKS

~ Settlement is the largest non-healthcare-related recovery ever obtained for claims brought under Virginia Fraud Against Taxpayers Act ~

RICHMOND (January 22, 2016)-Attorney General Mark R. Herring announced today that the Commonwealth of Virginia has recovered more than $63 million collectively from eleven banks to settle allegations that the banks misled the Commonwealth of Virginia and the Virginia Retirement System (VRS) through the sale of allegedly misrepresented residential mortgage-backed securities. This is the largest non-healthcare-related recovery ever obtained in a suit alleging violations of the Virginia Fraud Against Taxpayers Act.

“This case breaks new ground for Virginia, recovering millions for Virginia taxpayers from banks that we alleged had misrepresented the products they sold to the Commonwealth,” said Attorney General Herring. “Today’s settlement, which represents significant relief to VRS, taxpayers and pensioners of the Commonwealth, is one of the largest of its kind in the nation.”
The Commonwealth has resolved all claims against all eleven financial institutions that were alleged to have harmed VRS, the taxpayers, and the pensioners of the Commonwealth through misrepresentation of the quality of residential mortgage backed securities sold to VRS. The defendants have admitted no liability, and the Commonwealth has dismissed the claims against the defendants with prejudice, in exchange for settlements of the following amounts:

The case, styled Commonwealth of Virginia ex rel. Integra REC LLC v. Barclays et al., was initially filed in Richmond City Circuit Court by a relator, Integra REC, LLC, under the Virginia Fraud Against Taxpayers Act on behalf of the Commonwealth, and asserted both statutory and common law causes of action. Attorney General Herring intervened and brought the case on behalf of the Commonwealth of Virginia and the Virginia Retirement System. The Commonwealth sought to recover $383 million in alleged damages, including $250.66 million of realized losses. Assistant Attorney General Peter E. Broadbent, III, Assistant Attorney General Adam J. Yost, and Deputy Attorney General Rhodes B. Ritenour represented the Commonwealth in this matter with assistance from Gregory G. Taylor, Fraud Against Taxpayers Act Analyst.

The Times’ story reports tens of thousands of Florida homeowners are still waiting for help. The $7.6 billion fund was created by the Treasury Department to help homeowners in Florida and 17 other states avoid losing their homes during the recession.

“Only 20 percent of the 116,000 people who have applied have received help while nearly half of Florida’s $1 billion share of Hardest Hit funds remains unspent,” the Times reports. “If Florida fails to distribute the money by the end of 2017 — less than two years away — those funds will no longer be available.”

District Court of Appeal of Florida

Filed: January 20th, 2016

Status: Precedential

Docket Number:4D13-4713

Fingerprint:5476ed57d31008108249e2622a21ffdfbbf1a67f

The defendants appeal from the circuit court’s final judgment of
foreclosure in the successor plaintiff’s favor. The defendants primarily
argue the court erred in finding that the successor plaintiff had standing
at the time the original plaintiff filed the foreclosure action. We agree with
the defendants’ argument and reverse.
...

… commence the foreclosure action. See id. at *2 (reversing final judgment of foreclosure … appeal from the circuit court’s final judgment of foreclosure in the successor plaintiff’s favor. The defendants… at the time the original plaintiff filed the foreclosure action. We agree with the defendants’ argument… reverse. The original plaintiff filed a foreclosure complaint against the defendants. The original… behalf when the original plaintiff filed the foreclosure action. The circuit court found that “the…

District Court of Appeal of Florida

Filed: January 20th, 2016

Status: Precedential

Docket Number:4D13-4198

Fingerprint:6b784b105b2232bed7213a56fb8eea6377660b55

In this foreclosure appeal, the appellants contend that the appellee
failed to establish it complied with a condition precedent and that it had
standing at inception of the suit. As to the latter issue, we find merit and
reverse on that ground.
Mr. Ha executed a promissory note made payable to Countrywide
Home Loans, Inc. He and his wife executed a mortgage agreement
securing the loan. Subsequently, the appellee, BAC Home Loans
Servicing, L.P. f/k/a Countrywide Home Loans Servicing (“BAC”),
brought a foreclosure action against Mr. and Mrs. Ha. BAC alleged it
was the servicer for the owner and acting upon the owner’s authority.
The copy of the note attached to the complaint was made payable to
Countrywide Home Loans, Inc. and does not contain an endorsement.

Under Code of Civil Procedure section 580b, when an individual borrows money from a bank to buy a home and the bank forecloses on the home, the bank can collect proceeds from the foreclosure sale but nothing more. The bank may not obtain a deficiency judgment against the borrower if the sale proceeds are not enough to repay the loan. At issue here is whether the statute‘s antideficiency protection applies not only when a bank initiates a foreclosure sale, but also when a defaulting borrower arranges a short sale. In a short sale, the borrower sells the home to a third party for an amount that falls short of the outstanding loan balance; the lender agrees to release its lien on the property to facilitate the sale; and the borrower agrees to give all the proceeds to the lender. We hold, as the Court of Appeal did below, that the statute applies to short sales just as it does to foreclosure sales….

Ocwen agreed to pay a $2 million penalty after an SEC investigation found that the company inaccurately disclosed to investors that it independently valued these assets at fair value under U.S. Generally Accepted Accounting Principles (GAAP). In fact, Ocwen merely used the valuation performed by a related party to which it sold the rights to service certain mortgages that remained a financing liability in Ocwen’s accounting. Ocwen’s audit committee failed to review the methodology with company management or its outside auditor, and the related party’s valuation deviated from fair value measures. Ocwen consequently misstated its net income for the last three quarters of 2013 and the first quarter of 2014.

“Ocwen’s filings led investors to believe the company was valuing complex mortgage assets using GAAP rather than relying on a related company’s accounting methodology that later proved to be flawed,” said Michael J. Osnato, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “Ocwen released inaccurate financial statements because its internal controls were inadequate and its audit committee failed to scrutinize whether the methodology was an appropriate way to measure fair value.”

According to the SEC’s order instituting a settled administrative proceeding, Ocwen’s internal controls also failed to prevent conflicts of interest involving Ocwen’s executive chairman, who played a dual role in many related party transactions. Ocwen disclosed to investors that its executive chairman was required to recuse himself from transactions with related companies where he also served in a leadership position. But Ocwen had no written policies or procedures on recusals for related party transactions, and the recusal practice that existed was flawed, inconsistent, and ad hoc. Therefore, Ocwen’s executive chairman was able to approve transactions from both sides, including a $75 million bridge loan to Ocwen from a company where he also served as chairman of the board.

The SEC’s order finds that Ocwen violated Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13. Ocwen consented to the SEC’s order without admitting or denying the findings.

The SEC’s investigation was conducted by William Finkel, Elisabeth Goot, Kevin McGrath, Peter Altenbach, Kerri Palen, Sharon Bryant, and Daniel Nigro. The case was supervised by Daniel Michael and Steven Rawlings. The SEC appreciates the assistance of the New York Department of Financial Services and the Public Company Accounting Oversight Board.

NOT FOR PUBLICATION

OPINION

JOSE L. LINARES, District Judge.

This matter comes before the Court by way of Defendant Stern Lavinthal & Frankenberg LLC (“Stern Lavinthal”)’s Motion for Judgment on the Pleadings. (ECF No. 15.) The Court has considered the parties’ submissions and decides this matter without oral argument pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the reasons set forth below, the Court denies Stern Lavinthal’s motion.

Plaintiff Steven Psaros purchased the property at 81 Arlington Ave, Hawthorne, NJ in 1999 and has resided there since that time. (ECF No. 1 (“Compl.”) ¶ 6.) In January 2008 Plaintiff entered into a refinance loan whereby Plaintiff executed a promissory note payable to Mortgage Line Financial Corp, and also executed a mortgage to secure the loan. (Id. ¶¶ 7, 8.) Plaintiff alleges that he specifically negotiated the 2008 loan so that property insurance and real estate taxes would paid directly by Plaintiff, rather than through an escrow account managed by the lender. (Id. ¶ see also id. Ex. 1 (“Escrow Waiver”).)

On September 22, 2010 BAC Home Loans Servicing, L.P. by way of its counsel Stem Lavinthal filed a debt collection foreclosure action under New Jersey docket F-46572-10. (Id. ¶ 11.) Stem Lavinthal was not retained to pursue debt collection activities until after the loan was in default. (Id. ¶ 12.)

June 2013 Plaintiff received a letter from Green Tree advising that effective June 1, 201 servicing was transferred to Green Tree. (Id. ¶ 13; id. Ex. 2.) By way of letters dated June 17, 3 and July 18, 2013, Green Tree requested that Plaintiff send proof of property insurance to a designated Fax number. (Id. ¶¶ 14, 16; id. Exs. 3, 5.) On July 30, 2013 Plaintiffs insurance agent sent proof of property insurance to the designated fax number provided by Green Tree. (Id. ¶ 17; id. Ex. 6.) By way of letter dated August 4, 2013, Green Tree advised Plaintiff that force-placed insurance was obtained by Green Tree, and the policy (effective June 1, 2013) had an annual premium of $3,661.00. (Id. ¶ 19; id. Ex. 8.) After receiving the August 4, 2013 letter, Plaintiff again sent proof of insurance to Green Tree. (Id. ¶ 20; id. Ex. 9.)

On April 24, 2015, Stem Lavinthal, on behalf of Green Tree, filed a motion for entry of judgment in the foreclosure action. (See id. Ex. 11 at 1-2 (“State Court Notice of Motion”).) As part the State Court Notice of Motion, Stem Lavinthal stated that it “shall file the attached Certification of Proof of Amount Due required by law which will establish that there is due upon Plaintiffs obligation and mortgage the sum of $377,287.24 as of April 9, 2015, together with interest thereon.” (Id. at 2.) In an attached document captioned “Proof of Amount Due Affidavit and Schedule” and dated April 23, 2015, Green Tree employee Danielle Froelich executed a certification of amount due, which included the sum of $10,974.37 for “Home Owners Insurance Premiums” due as of April 9, 2015 within the $377,287.24 total amount due. (Compl ¶ 23; id. Ex. 11 at 4-7 (“State Court Proof of Amount Due”).) Additionally, Stem Lavinthal attorney Donna M. Miller submitted a “Certification of Diligent Inquiry” which states in relevant part as follows:

2. On April 7, 2015 and again on April 24, 2015, I communicated by client interface and overnight delivery with the following named employee(s) of plaintiff/plaintiffs servicer, who informed me that he/she has personally reviewed the documents submitted to the Court, affidavit of amount due and the original or a true copy of the note, mortgage, and recorded assignments, if any, and that he/she confirmed the accuracy of all documents:

Name of employee(s) of Servicer for Plaintiff/Plaintiff: DANIELLE FROELICH

Title of employee(s) of Servicer for Plaintiff/Plaintiff: FORECLOSURE REPRESENTATIVE

Responsibilities of employee(s) of Servicer for Plaintiff/Plaintiff: REVIEWS AND CONFIRMS THE ACCURACY OF THE FORECLOUSRE AFFIDAVIT.

3. Based on my communication with the above-named employee(s) of Plaintiff, as well as my own inspection of the documents filed with the court and other diligent inquiry, I execute this certification to comply with the requirements of Rule 4:64-2(d) and Rule 1:4-8(a).

(Compl. Ex. 11 at 8-9 (“State Court Cert. of Diligent Inquiry”).)

Plaintiff alleges that all times pursuant to the 2008 Mortgage Loan contract, Plaintiff has maintained an insurance policy on the property, has sent all insurance premiums to the insurance carrier to pay for the hazard insurance policy, and has provided copies of same to the loan servicer upon request. (Id. ¶¶ 24, 26.) Accordingly, Plaintiff avers that Green Tree has not incurred costs of $10,974.37 for payment of insurance premiums. (Id. ¶ 25.)

PROCEDURAL HISTORY

Plaintiff commenced this action on June 24, 2015, two months after the alleged false representation occurred, by filing a two count Complaint. (Compl.) With respect to Stem Lavinthal, Plaintiff alleges that it violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) by demanding payment of insurance premiums that were not actually owed under Plaintiff’s loan agreement. (Id. at 6-8.)[2]

August 17, 2015, Stem Lavinthal filed an Answer to the Complaint, which includes a cross-claim against its client Green Tree. (ECF No. 11.) On October 9, 2015: Stem Lavinthal filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b) (ECF No. 13); withdrew the Motion to Dismiss so that it could be re-filed as a Motion for Judgment on the Pleadings (ECF No. 14); and filed the instant Motion for Judgment on the Pleadings (ECF No. 15; see No. 15-2 (“Mov. Br.”)). On October 26, 2015, Green Tree filed an Answer to Stem Lavinthal’s cross-claim and filed a cross-claim against Stem Lavinthal. (ECF No. 21.) On October 28, Stem Lavinthal filed an Answer to Green Tree’s cross-claim. (ECF No. 23.) On November 23, 2015, Plaintiff filed opposition to the instant motion (ECF No. 25 (“Opp. Br.”)), and on November 30, 2015, Stem Lavinthal filed a reply (ECF No. 26 (“Reply Br.”)).

To withstand a motion to dismiss for failure to state a claim, “a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “The plausibility standard is not akin to a `probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.

To determine the sufficiency of a complaint under Twombly and Iqbal in the Third Circuit, the court must take three steps: first, the court must take note of the elements a plaintiff must plead to state a claim; second, the court should identify allegations that, because they are no more than conclusions, are not entitled to the assumption of truth; finally, where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief. See Burtch v. Milberg Factors, Inc., 662 F.3d 212, 221 (3d Cir. 2011) (citations omitted). “In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits attached to the complaint, matters of the public record, as well as undisputedly authentic documents if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223, 230 (3d Cir. 2010). Among the public records a court may examine in order to resolve a motion to dismiss is a judicial proceeding from a different court or case, court must be mindful of the distinction between the existence of a fact and its truth. S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Grp. Ltd., 181 F.3d 410, 426, 427 n.7 (3d Cir. 999).

B. Fair Debt Collection Practices Act

The purpose of the FDCPA is “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). When Congress passed the legislation in 1977, it found that “[a]busive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and invasions of individual privacy.” Id. § 1692(a). “As remedial legislation, the FDCPA must be broadly construed in order to give full effect to these purposes.” Caprio, 709 F.3d at 148. Accordingly, the Court must “analyze the communication giving rise to the FDCPA claim `from the perspective of the least sophisticated debtor.'” Kaymark v. Bank of America, N.A., 783 F.3d 168, 174 (3d Cir. 2015) (quoting Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008). Furthermore, “[t]he FDCPA is a strict liability statute to the extent it imposes liability without proof of an intentional violation.” Allen ex Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).

To prevail on an FDCPA claim, a plaintiff must prove that (1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant’s challenged practice involves an attempt to collect a `debt’ as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt.” Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 201 (citation omitted). Here, Plaintiff has alleged all four elements (Compl. ¶¶ 28, 29, 33, 35), and Stern Lavinthal does not dispute the first three prongs. At issue is the fourth prong: whether Stern Lavinthal violated a provision of the FDCPA in attempting to collect the debt.

ANALYSIS

Plaintiff alleges that Stern Lavinthal violated 15 U.S.C. § 1692e by making and/or using “false, deceptive and/or misleading representations in connection with its effort to collect a debt” (id. ¶ 35(a)), in particular with respect to “the character and amount of the debt it sought to collect from Plaintiff, in violation of 15 U.S.C. § 1692e(2).” (Id. ¶ 35(b).) The relevant statute states as follows:

False or misleading representations. A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

. . .

(2) The false representation of —

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

15 U.S.C. § 1692e.

The issue before the Court is whether Stern Lavinthal violated § 1692e when it filed the State Court Notice of Motion and the State Court Cert. of Diligent Inquiry. As noted, the State Court Notice of Motion stated that Stern Lavinthal “shall file the attached Certification of Proof of Amount Due required by law which will establish that there is due upon Plaintiff’s obligation and mortgage the sum of $377,287.24 as of April 9, 2015, together with interest thereon.” (Id. at 2.) State Court Notice of Motion referenced the State Court Proof of Amount Due, in which Green Tree employee Danielle Froelich included the sum of $10,974.37 for “Home Owners Insurance Premiums” in the $377,287.24 total amount due. (State Court Proof of Amount Due at 3.) With respect to the State Court Cert. of Diligent Inquiry, Stern Lavinthal attorney Donna M. Miller stated in relevant part as follows:

2. On April 7, 2015 and again on April 24, 2015, I communicated by client interface and overnight delivery with the following named employee(s) of plaintiff/plaintiffs servicer, who informed me that he/she has personally reviewed the documents submitted to the Court, affidavit of amount due and the original or a true copy of the note, mortgage, and recorded assignments, if any, and that he/she confirmed the accuracy of all documents:

Name of employee(s) of Servicer for Plaintiff/Plaintiff: DANIELLE FROELICH

Title of employee(s) of Servicer for Plaintiff/Plaintiff: FORECLOSURE REPRESENTATIVE

Responsibilities of employee(s) of Servicer for Plaintiff/Plaintiff: REVIEWS AND CONFIRMS THE ACCURACY OF THE FORECLOUSRE AFFIDAVIT.

3. Based on my communication with the above-named employee(s) of Plaintiff, as well as my own inspection of the documents filed with the court and other diligent inquiry, I execute this certification to comply with the requirements of Rule 4:64-2(d) and Rule 1:4-8(a).

(State Court Cert. of Diligent Inquiry at 1-2.)

Stem Lavinthal moves for dismissal on two grounds. First, Stem Lavinthal contends that its alleged conduct does not implicate the FDCPA because it did not make a false representation. (Mov. Br. at 13-17; Reply Br. at 6-11.) Stem Lavinthal contends that Plaintiff’s claim fails as a matter law because the State Court Cert. of Diligent Inquiry “is utterly devoid of any false representations whatsoever” and that there is a fundamental and dispositive distinction between affirmatively “certifying the accuracy” of Green Tree’s statements, as Plaintiff alleges in the Complaint, versus merely filing a “Certification of Diligent Inquiry,” as required by the New Jersey Court Rules. (Mov. Br. at 3-4, 6-9, 13-17; Reply Br. at 6-11.) Second, Stem Lavinthal alternatively argues that Plaintiff waived his right to contest the amount owed to Green Tree by declining to oppose the underlying foreclosure, (Mov. Br. at 18-19; Reply Br. at 12-13), and similarly argues that the doctrine of judicial estoppel prohibits Plaintiff from taking a position inconsistent with his decision to forego any defense in the underlying foreclosure action (Mov. Br. at 1; Reply Br. at 13-14).

In opposition, Plaintiff first argues that because Stem Lavinthal’s motion “includes several exhibits not directly relating to the controversy” the Court should either deny the motion outright or convert it to one for summary judgment. (Opp. Br. at 5-7.) Second, Plaintiff argues that the motion should be denied as procedurally untimely because the pleadings were still open when it was filed, thus making Rule 12(c) inapplicable on its face. (Id. at 7-8.) Third, even if the motion is considered procedurally proper, Plaintiff contends that the Complaint sets forth a valid claim for relief under the FDCPA: by seeking to collect $10,974.37 not owed by Plaintiff (included in the total amount sought of $377,287.24), Stem Lavinthal violated 15 U.S.C. § 1692e(2) because it made a false representation of the amount of debt owed. (Opp. Br. at 8-13.) Plaintiff argues that Stem Lavinthal has not established the lone defense to liability where a debt collector has engaged in conduct that violates the FDCPA, and avers that “Stem Lavinthal cannot evade its responsibilities as a debt collector by blaming its client for providing it with factually inaccurate information used in the process of collecting a debt.” (Id. at 13-15(citing15 U.S.C. § 1692k(c)).) Finally, Plaintiff argues that a debtor has no obligation to notify a debt collect that it has engaged in conduct violating the FDCP A prior to the debtor filing suit under the FDCPA, such that concepts of waiver and judicial estoppel are inapplicable to Plaintiffs claims. (Id. at 15-19.)

Court agrees with Plaintiff.[3] The Court first addresses the statute and then discusses waiver and judicial estoppel.

A plain reading of the statute leads to the conclusion that a violation has occurred. In pertinent part, § 1692e(2)(A) prohibits the “false representation of . . . [the] amount . . . of any debt[.]” Id. Here, Plaintiff has alleged that Stem Lavinthal made a false representation with respect to “the character and amount of the debt it sought to collect from Plaintiff, in violation of 15 § 1692e(2).” (Compl. ¶ 35(b).) Specifically, Plaintiff alleges that “Stem Lavinthal’s demand for payment of $10,974.37 was a demand for funds not owed and fees not incurred” (id. ¶ 35(d)), and that “Stem Lavinthal affirmed the use of false allegations in an effort to collect money not owed by Plaintiff’ by filing the State Court Cert. of Diligent Inquiry (id. ¶ 35(c)). In essence, construing the Complaint in a light most favorable to Plaintiff, the Complaint alleges that when Stem Lavinthal attempted to collect $377,287.24 from Plaintiff on behalf of Green Tree, Stem Lavinthal misrepresented the amount of the debt in violation of the statute because the total amount sought included $10,974.37 in Horne Owners Insurance Premiums which were allegedly not owed to Green Tree. Accepting the allegations as true, as the Court must at this stage, the Court finds that Plaintiff has sufficiently alleged a violation of the statute’s plain language. Because the statute’s language is plain, the Court’s function is “to enforce it according to its terms,” so long as “the disposition required by that [text] is not absurd.” Alston v. Countrywide Fin. Corp., 585 F.3d 753, (3d Cir. 2009) (quoting Lamie v. U.S. Tr., 540 U.S. 526, 534 (2004)).

Kaymark extended this rationale from a demand letter to a formal pleading in a foreclosure action. Kaymark, a mortgagor alleged that when a law firm initiated foreclosure proceedings on behalf of the mortgagee, the body of the foreclosure complaint filed by the law firm falsely represented the amount of the debt in violation of § 1692e by including not-yet-incurred attorneys’ fees, report fees, and property inspection fees. Id. at 171. Despite the fact that the alleged misrepresentation was contained in a foreclosure complaint, the Third Circuit held that the mortgagor had adequately stated a claim under § 1692e, upon an analysis of “the statutory text, as well at the case law interpreting the text[.]” Id. at 176.

First, the Court noted that it is “well-established in this Circuit” that “the FDCPA covers attorneys engaged in debt collection litigation[.]” Id. at 176-77 (citing Heintz v. Jenkins, 514 U.S. 291 (1995) (holding that attorneys “engage[d] in consumer-debt-collection activity, even when that activity consists of litigation” are covered by the FDCPA); Piper v. Portnoff Law Assocs., 396 F.3d 227, 234 (3d Cir. 2005) (“[I]f a communication meets the [FDCPA’s] definition an effort by a `debt collector’ to collect a `debt’ from a `consumer,’ it is not relevant that came in the context of litigation.”)).[4] Second, the Court observed that Congress has not specifically excluded formal pleadings in foreclosure actions from the FDCPA. “Subsequent to Heintz, Congress twice amended the statute and exempted `formal pleading[s] made in connection with a action’ from 15 U.S.C. § 1692e(11), as amended Pub.L. No. 104-208, § 2305(a), 110 Stat. 3009, 3009-425 (1996), and `communication[s] in the form of []formal pleading[s]’ from § 1692g(d), as amended Pub.L. No. 109-351, § 802(a), 120 Stat. 1966 (2006).” Id. at 177. “If Congress had wanted to exclude formal pleadings from the protections of the FDCPA under any of other provisions, it could have done so. It did not. Thus, except for §§ 1692e(11) and 1692g(d), [t]he amendment[s] by [their] terms in fact suggest[ ] that all litigation activities, including formal pleadings, are subject to the FDCPA.'” Id. (quoting Sayyed v. Wolpoff & Abramson, 485 F.3d 226, 231 (4th Cir. 2007)). Ultimately, the Third Circuit concluded “that a communication cannot be uniquely exempted from the FDCPA because it is a formal pleading, or in particular, a complaint” and noted that “[t]his principle is widely accepted by our sister Circuits.” Id. (citing cases); see also id. at 179 (concluding that the FDCPA does not “exclude foreclosure actions from its reach”).[5]

The holdings and underlying rationale in McLaughlin and Kaymark suggest that the FDCPA extends to the facts of this case. Keeping in mind that “[a]s remedial legislation, the FDCPA must be broadly construed in order to give full effect to [Congress’s] purposes,” Caprio, 709 F.3d at 148 (3d Cir. 2013), the Court finds that Plaintiff’s allegations that Stem Lavinthal falsely represented the amount of the debt when it filed the State Court Notice of Motion and State Court Cert. of Diligent Inquiry in an attempt to collect the debt on behalf of the mortgagee are sufficient to state a claim under § 1692e(2). In other words, when analyzing the text of the statute and relevant case law interpreting it, the Court cannot say that Congress intended to exempt litigation activities such as these from the purview of the FDCPA. As the Third Circuit noted, “[a]bsent a finding that `the result [will be] so absurd as to warrant implying an exemption for’ FDCPA claims involving foreclosure actions, [the Court] is not empowered to disregard the plain language the statute.” Kaymark, 783 F.3d at 179 (quoting Heintz, 514 U.S. at 295). “Thus, [defendant’s] arguments are more `properly addressed to Congress,’ which `is, of course, free to amend the statute accordingly.'” Id. (quoting Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, U.S. 573, 604 (2010)).

B. Plaintiff Did Not Waive His FDCPA Claim by Failing to Appear in the State Court Foreclosure Proceeding and the Court Declines to Judicially Estop Plaintiff from Asserting the Claim

Stem Lavinthal argues that because Plaintiff did not contest the amount of the debt in the foreclosure proceeding, he either waived his right to assert a claim under the FDCPA, or the Court should judicially estop him from doing so. Generally speaking, waiver is a “voluntary relinquishment—express or implied—of a legal right to advantage[.]” Black’s Law Dictionary 1611 (8th ed. 2004). That has not occurred here. First, the Third Circuit has made clear that “a consumer is not required to seek validation of a debt he or she believes is inaccurately described in a debt communication as a prerequisite to filing suit under § 1692e.” McLaughlin, 756 F.3d at 248; see also 15 U.S.C. § 1692g(c) (“The failure of a consumer to dispute the validity of a debt . . . . may not be construed by any court as an admission of liability by the consumer.”). The Court also notes that the State Court Notice of Motion and the State Court Cert. of Diligent Inquiry—the documents giving rise to liability here—were filed in April 2015. Plaintiff initiated this lawsuit in June Thus, again keeping mind that “[a]s remedial legislation, the FDCPA must be broadly construed in order to give full effect to [Congress’s] purposes,” Caprio, 709 F.3d at 148 (3d Cir. 201 the Court does not find that Plaintiff waived his right to assert a claim under the FDCPA. By failing to contest the amount owed in the foreclosure proceeding.

For similar reasons, the Court also declines to impose the doctrine of judicial estoppel, which is “a judge-made doctrine that seeks to prevent a litigant from asserting a position inconsistent with one that she has previously asserted in the same or in a previous proceeding.” Ryan Operations G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 358 (3d Cir. 1996). In short, Plaintiff did not assert a position in the foreclosure proceeding. He filed this lawsuit instead, which for the reasons explained above appears to be well within his rights.

CONCLUSION

For the reasons above, the Court denies Stem Lavinthal’s motion. An appropriate Order accompanies this Opinion.

[2] The second count of the Complaint alleges violation of the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601, et seq. against Green Tree only, and is thus not pertinent to the instant Motion. (See Compl. at 9-10.)

[3] As an initial matter, the Court finds the motion-filed under Rule 12(c) as a motion for judgment on the pleadings to be procedurally proper. A party may move for judgment on the pleadings under Rule 12(c) “[a]fter the pleadings are closed — but early enough not to delay trial[.]” Fed. R. Civ. P. 12(c). Here, Stern Lavinthal filed an Answer to Plaintiff’s Complaint on August 17, 2015, and therein asserted a cross-claim against Green Tree. (ECF No. 11.) Thus, although the pleadings between Stern Lavinthal and Green Tree may not have been closed as of the date the instant motion was filed, the pleadings between Plaintiff and Stern Lavinthal were closed as of August 17, 2015. Accordingly, the Court finds the instant motion to be procedurally proper. Additionally, the Court declines to convert the instant motion to one for summary judgment, because all of the exhibits relied on by the parties are either attached to Plaintiff’s Complaint or matters of public record subject to judicial notice that directly relate to Plaintiff’s claims. See Mayer, 605 F.3d at 230; S. Cross Overseas Agencies, 181 F.3d at 426, 427 n.7.

[4] As noted, there is no dispute here that Stem Lavinthal acted as a “debt collector” when it “attempt[ed] to collect” a debt on behalf of Green Tree in the foreclosure proceeding, or that Plaintiff is a “consumer.” 15 U.S.C. §§ 1692a(3), (6).

[5] The Court additionally found that the foreclosure complaint fell within the parameters of § 1692e because the mortgagor, and not merely the court, was the intended recipient of the communication. Id. at 178 (concluding that the foreclosure complaint “was unquestionably a communication directed at Kaymark in an attempt to collect the debt” because the complaint “was served on Kaymark (directly or indirectly through his attorney)”).